Permira exits Arysta LifeScience

December 2014 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

December 2014 Issue

Chemical manufacturing company Platform Specialty Products announced in October that it has entered into a definitive agreement to buy Irish agriculture chemical maker Arysta LifeScience for $3.51bn, including debt. The deal brings to an end private equity (PE) firm Permira’s six year involvement in Arysta. The PE group acquired the company in March 2008 for $2.4bn in its first deal in Japan.

According to a statement announcing Platform’s acquisition of the firm, which is expected to close in the first quarter of 2015, the transaction will be funded through a combination of cash on hand, convertible equity and debt. Under the terms of the deal, Platform Specialty will pay $2.91bn in cash as well as $600m in stock to Permira. John Coyle, a partner at Permira, said “This transaction is a testament to the significant transformation Arysta has undergone under Wayne Hewett, his team and our funds’ ownership. Since 2008, the company has consistently grown revenues and considerably increased profits by expanding into high growth markets and focusing on solutions driven products to meet growers’ needs around the globe.”

The sale of Arysta, which moved its global headquarters from Tokyo to Dublin in 2013 in order to capitalise on Ireland’s low corporate tax rates, will provide Permira with a 70 percent return on its initial investment in the company, excluding the stake it will retain in Platform. Arysta was formed in 2001 when two agricultural-chemical businesses were spun out of Japanese trading houses and merged.

Chemical manufacturer Arysta specialises in insecticides, fungicides, herbicides and related agrochemicals and currently has around 3600 product registrations in more than 100 countries. In 2013, the company reported net sales of $1.5bn with the majority of its sales derived from high growth regions. Latin America and Africa, Central and Eastern Europe, China and South Asia accounted for more than 65 percent of Arysta’s 2013 sales.

Platform, which was formed in 2013 out of a shell company and taken public on the London stock exchange later that year, has pursued an acquisitive growth strategy during its short history. Since its inception, the firm has already completed a number of acquisitions of smaller businesses, including the $1.8bn takeover of chemical manufacturer MacDermid in 2013, the €300m purchase of Belgium-based agrochemicals company Agriphar and the recently announced $1bn acquisition of Chemtura AgroSolutions (CAS) for around $1bn. Platform believes that the combination of the company’s various agrochemical operations will result in annual synergies in the region of $65m.

Since the firm became part of the Permira portfolio, Arysta too has employed an acquisition growth strategy. The company has completed a number of deals for companies operating in France, Russia, South Africa and the US. Speaking about the deal, Mr Hewett noted that “The strength of Arysta’s strategy is evident through the growth we have exhibited in recent years and having Platform as our new home and the benefit of the products and personnel within CAS and Agriphar will provide us with additional resources and talent to accelerate this momentum. With powerful global trends placing increasing demand and new challenges on growers around the world, the product lines and innovation capabilities of Platform’s agrochemicals companies will be among the leaders in offering the most comprehensive range of traditional and non-traditional solutions.”

It is believed that Permira has been considering an exit of Platform for some time. Initial reports of a potential sale or IPO first appeared in March 2014, and although the firm filed the paperwork for a US IPO in September, Platform’s interest in a buyout of Arysta continued to develop regardless.

Upon completion of the deal, Mr Hewett is expected to join Platform’s senior leadership team as its president and will lead the company’s combined agrochemical businesses.

The acquisition of Arysta is the largest deal announced in the agrochemicals industry since Russian fertiliser manufacturer OAO Uralkali bought OAO Silvinit in a deal worth around $6.6bn in 2010.